I'll show you how to send for it in just a second. First though, let me show you how this new "Second Wave" bust cycle has already begun to unfold...

Deadly Domino #1:
Building Permit Applications
Plummet as Confidence Dries Up

In Torrey Pines -- near downtown Las Vegas -- you'll find one gorgeous four-bedroom house after another. All new. Each on generous 7,000 sq. foot lots. There's one problem.

Many of these houses -- up to 10 per block -- are empty.

"Those who think that the worst may be over for the housing market should take another look at the data... " - The New York Times, January 7, 2007

It's like driving through an upscale version of a shell-shocked urban neighborhood, only instead of boarded-up windows and graffiti, you've got stucco and central air conditioning. And new "ghost towns" like Torrey Pines have cropped up all over formerly "hot" US property markets.

Why? "It's economics 101," says Thomas L., one of the brokers who works the Vegas market, "Buyers aren't buying... supply exceeds the demand and we just have more inventory than we have buyers."

In the valley around Vegas, you'll find more than 22,000 homes on the market. Out of those, 9,800 are empty. Desperate sellers hope they can at least rent the spaces, even at cut rates. Meanwhile, 45% of all desperate developers say they're ready cut prices too.

But here's the real worry...

Proof That Builders See a
Mega-Bust on the Horizon

Even bigger than houses that won't sell now is the fact that huge numbers of U.S. builders don't see houses selling all too well down the road, either. Take Doug McGraw.

McGraw heads up a Florida construction company, near Fort Lauderdale. Just recently, he was ready to build a 205-unit condo near Fort Lauderdale. Now, he's not. Why?

"[Spending on houses] hasn't just slowed down a little bit," says McGraw, "it's slowed down a lot... anybody who did not already have a shovel in the dirt has chosen to wait until the market settles."

And it might be a long wait.

Take a look at this chart...

If you're a builder, about to sink millions into a new development, what's the first thing you do? You make sure you can get a permit to start developing the land. That's why experts consider the rate of housing permit applications such a good hidden indicator of the future economy.

When it's going up, the economy will likely go up. Because the property industry drives a huge chunk of the job market. But also because when applications are soaring, it means that a boom is exactly what builders -- who live and breath by predicting the future economy -- are betting on.

What does it say when building permit applications start to plummet?

It means builders see plunging home sales, a tight economy, and even a recession on the horizon. Pay attention. Because this is exactly the signal I'm showing you in the chart above. Early last year, the total new number of housing permit applications fell off a cliff.

"A little over a year ago, buyers couldn't wait to sign contracts to purchase homes. Now, many can't wait to get out of them... buyers are backing away from deals in droves." - The Wall Street Journal

It's plunged ever since.

This is like looking at a crystal ball, telling you what the property developing pros foresee for the broad economy -- not just for 2007, but for 2008, 2009, and even further out. And what the current breaking point above tells us is, in a word, outright ugly.

Given that a mind-blowing 43.15% of all the new jobs in America since 2001 have come from the housing market... this should be terrifying news, even if you don't own a home.

Because, see, when nearly half the new jobs in the U.S. are in jeopardy... when major building companies, the banks that back them, and the other businesses that depend on a housing boom see income vaporize... that can't help but spell bad things for the broad economy, even well outside the housing market.

How ominous is the current signal? By the tail end of last year, overall applications for building permits were down 31.3% from the year prior... and at their lowest permit total since December 1997.

Says Tim Eller, the CEO of the third largest homebuilder in the U.S., Centex, ``We are navigating through one of the most challenging housing environments in the past 25 years,''

Buyers are even canceling sales contracts. Developers are dumping inventory. And still, builders are wracking up losses. Centex, for instance, just wrote off $510 million worth of value on property they both owned and had options to buy. And they're about to let another $450 million in land and options go up in smoke.

No wonder even Bill Gates is dumping shares...

Yep. During the boom, Gates got caught up in the mania and added seven different home building stocks to the portfolio of the famous multi-billion dollar charity trust he runs with his wife.

This past December, he dumped them. Stocks like Centex Corp., KB Home, Pulte Homes Inc., Lennar Corp., Beazer Homes USA Inc, Ryland Group Inc. and WCI Communities Inc. all got kicked out of his fund.

Bruce Karatz, head of KB Homes, says this is the worst he's ever seen... including the collapsing market of the early 1990s. And Gary Gordon, head of the mortgage investment firm Annaly Capital, says falling construction alone could shear 2% of the U.S. GDP.

That's more than $250 billion -- gone in a puff of smoke!

Bigger Than the Dotcom Bomb or S&L Bust...
And Twice as Devastating For Your Wealth

Most catastrophes have a ripple effect.

Maybe you remember, for instance, when the Savings & Loan crisis came to a head in 1989. Over 1,000 small banks made big, bad loans that nearly put them out of business forever.

Dubya's daddy, George Bush Sr., engineered a $125 billion bailout. Wall Street seized up like a Plymouth in January... the U.S. deficits soared... and the U.S. economy slipped into a two-year recession.

Or how about when the Dotcom Bomb finally fell out of the sky?

"For cash-strapped homeowners, it was a pitch they couldn't refuse: Refinance your mortgage at a bargain rate and cut your payments in half... but those who took the bait are in for a nasty surprise: payments are about to skyrocket." - Business Week

Millions lost billions, so-called government "surpluses" vaporized, and again we got a recession. Even Wall Street didn't recover for another three years. Some stocks never recovered at all, disappearing from the ticker entirely.

Here's the thing...

In the 1989 crisis, fewer people owned real estate. In the 2000 Tech Bust, not everybody owned tech stocks. But in both cases, the impact was far reaching. What does that mean now, when most Americans own property AND a mortgage, alongside their stock portfolios? What does it mean when so many of the new jobs in America -- as much as 43%, remember -- came from the housing industry?

In the tidal wave of falling property prices ahead, it means tighter spending. Lost jobs. Troubles for retail, restaurants, car dealers, advertising companies, jewelers, remodeling contractors, furniture manufacturers, banks, electronic retailers, and more.

Foreign investors pull their cash out of the U.S. market too.

It's like a virus -- it can't help but spread.

When it does, what are you supposed to do?